Question

1. Because insurance companies must maintain adequate reserves to pay policyholders, they typically place most of their investments in:

1. Fixed Income Instruments i.e. bonds
2. Hedge Funds
3. Large Cap companies on the NYSE
4. Foreign Investments

2. Prior to the IPO, the seller would have probably sought the services, and funds, of a venture capital firm. In exchange for the funds, VC firms typically:

1. Require at least one seat on the Board of Directors
2. Take a very active stance in the operation of the company
3. Demand significant special reporting
4. Look for an “exit” in 5 – 7 years.
5. All the above
6. None of the above.

3. There was a huge spike in IPO’s during:

1. The 2006 sub-prime crisis
2. The Dot Com bubble at the turn of the millennium
3. The Mid-east oil embargo
4. The aftermath of WWII

4. What is the term given to the package of financial data a company is required to compile if they initiate an IPO.

1. Prospectus
2. Habeas Corpus
3. Evidence of beneficial ownership
4. Special Audit

Answer 1

1. The investment companies must keep most of the reserves in in fixed investments like bonds so that they can pay off their short term repayment schedule without any liquidity crunch.

(A)Fixed Income Instruments i.e. bonds is the correct answer.

2.All of the given statement are correct because in exchange of funds venture capitalist demands for a position in board of directors of the company, they also look for adequate control through special reporting ,special exit procedure etc

Show the correct option is (E) All of the above.

3.There was a huge spike in listing of companies during tech bubble of late 1990s.

So ,the correct answer is the (B) dotcom bubble at the end of millennium

Rest options indicates other economic crisis so are not relevant.

4. The package of special data financial companies prepare before filing for initial public offer is known as prospectus of the company.

Show the correct answer would be (A) Prospectus.